Fonterra raises prices for Vic and Tas suppliers

Fonterra announced today that it will increase its farmgate milk pirices for Victorian and Tasmanian farmer suppliers after a pricing review.

The company will now offer farmers a further 8c per kg of fat, and 20c per kg of protein (13c per kg of milk solids).

Fonterra’s National Milk Services Manager, Heather Stacy, said the increase reflects conditions in global dairy commodity markets where prices have held and then strengthened during December and January.

“Whole milk powder is now trading above US$3,700 per tonne internationally and, despite the challenges created by the strong Australian dollar, we are pleased to be able to pass through the benefit of higher prices to our suppliers,” said Stacy.

The milk price increase applies across-the-board to all current Victorian and Tasmanian suppliers and will be backdated to 1 July 2010.

“This increase represents an additional $16 million in the pockets of Fonterra suppliers this season,” said Stacy.

“Hopefully this increase will be welcome news for all Fonterra suppliers, especially those farmers in flood-affected areas of Victoria. We are currently working with industry to determine how best to support farmers impacted by recent extreme rain and floods.

“Our average annual price is now in the order of $5.00 per kg of milk solids, which means Fonterra suppliers are on track for a milk price this season that is one of the highest on record.

“We remain determined to reflect any further significant improvement in market conditions in our farmgate prices. One important constraint on the returns being generated by the dairy industry is the fact the Australian dollar continues to trade at or above parity with the United States currency.”